Commuting vs Business Travel: HMRC Rules and How Expense Tools Handle Them

In brief: Ordinary commuting (home to a permanent workplace) can’t be reimbursed tax free. Travel to a temporary workplace usually can. One HM Revenue and Customs (HMRC) rule decides most cases: the 24-month rule. A workplace becomes permanent when an employee spends 40% or more of their working time there over a period expected to last more than 24 months, and both parts have to apply. Hybrid working doesn’t change the rules, but it makes the facts harder to audit. Capture Expense calculates mileage from postcodes and deducts the commute where your organisation’s policy requires it.

This is general guidance, not tax advice. Check HMRC’s guidance and speak to an adviser before relying on it.

What counts as commuting

Business mileage covers journeys made in the course of work: visiting clients, travelling between work sites, or attending meetings away from your normal workplace.

Home to a permanent workplace is ordinary commuting, however early the start or long the drive. Reimburse it anyway, and it becomes taxable earnings that go through payroll.

Two details catch a lot of claims out:

• Mixed journeys: where a trip has a private and a business purpose, the private element comes out.
• Journeys that look like the commute: HMRC treats a trip to a temporary workplace as commuting if it’s substantially the same as the normal journey, in broadly the same direction and of similar length. In practice, it won’t argue this where the extra distance is 10 miles or more each way (EIM32300).

For mileage rates, subsistence, and VAT, see our HMRC travel and expense rules guide.

The 24-month test

A workplace is temporary if an employee goes there to perform a task of limited duration or for a temporary purpose. The 24-month rule then sets the limit. The workplace becomes permanent once the employee spends, or expects to spend, 40% or more of their working time there over a period lasting more than 24 months (490, paragraphs 3.18 to 3.22).

The test looks at expectation, not just history. A workplace stops being temporary from the date the expectation changes, and HMRC’s own examples show how much that matters:

• Posting extended: an 18-month full-time posting is extended to 28 months after 10 months. Travel qualifies for relief for the first 10 months, but not after.
• Posting cut short: a 28-month full-time posting ends after 18 months. No relief is due at any point, because attendance was expected to exceed 24 months from the start.

That means finance teams need a record of when the expectation changed. Keep the email or project plan confirming an extension against the employee’s record, so you can show which journeys fall either side of the date.

The 40% test

The 40% figure isn’t a separate test. It’s the second half of the 24-month rule: HMRC uses it to decide whether an employee is doing “continuous work” at a location (paragraph 3.19). Duration and share of working time are judged together:

Based on HMRC Examples 19, 16, 17, and 12 in 490 Chapter 3.

Be aware that HMRC uses both “40% or more” and “more than 40%” in the same chapter, so take advice on a pattern sitting exactly at two days in five. Separately, if someone regularly spends 40% of their time at a second location for ongoing duties, HMRC will normally presume it’s a second permanent workplace (paragraph 3.46). In that case, the 24-month rule doesn’t come into it.

Hybrid workers

A hybrid employee who goes to the office two or three days a week has a regular workplace, so those journeys are commuting. HMRC confirmed this in 2024 (paragraph 3.39): choosing to work from home doesn’t make the office temporary. Even where home counts as a workplace for other purposes (see our guide to working from home tax relief), travel from home to a permanent office is still commuting.

A trip to a client site on a home-working day is business travel, but the claim should be calculated from the right start point, which is where mileage for hybrid and remote teams gets harder to check. Policies differ here. Some organisations deduct the normal commute from journeys that start at home and end at a client site, although HMRC only requires that where the trip is substantially the same as the commute. Whichever approach you take, write it into the policy and apply it the same way for everyone.

What the evidence from an audit looks like

Diocese of Norwich Education Services Company (DoNESC), a Capture Expense customer, found that 80% of its expense claims were travel related. Mileage claims were particularly hard to audit, with no controls for deducting the commute element.

“With 80% of our claims being travel-related, manual tracking was a time-consuming task.” Financial Controller, DoNESC

When a mileage claim is reviewed, auditors will typically want four things:

• the start and end points
• how the distance was worked out
• the rate applied
• the policy behind it.

A claim typed in as a bare mileage figure answers none of these. Keep the evidence for at least three years from the end of the tax year, in line with HMRC record keeping rules for PAYE and expenses records.

How Capture Expense separates commuting from business travel

Capture Expense deducts the commute on every mileage claim, using each claimant’s saved home and office locations, so nobody relies on memory.

• Distance calculated, not typed: journey start, destination, and waypoints can be entered as home, office, postcodes, or saved places, then adjusted on a map.
• Commute set per claimant: home and office locations sit in each claimant’s settings, and a one-way or two-way commute is deducted from the mileage reimbursed, as your policy specifies.
• HMRC rates by vehicle: HMRC approved mileage rates are applied with cumulative 10,000-mile banding per person, and route evidence is kept on each claim. Rates carry an effective-from date, which matters when the rate above 10,000 miles rises from 25p to 35p on 6 April 2027 following the Autumn Budget 2026.

Commute deduction and mileage banding are included in Vehicle Mileage from the Business plan. Your organisation still needs a mileage policy that matches how you pay, and home and office details need updating when someone moves house or changes base. Because mileage runs through the same travel expense management tools, each journey can be linked to its trip, with departure and return times feeding the subsistence claim for the same day.

What to ask any vendor

Use these five questions to compare tools, including those in our round-up of the best business mileage trackers:

• Does it deduct commuting automatically, or rely on the claimant to remember?
• Is the commute set per person or per policy?
• Is distance calculated from addresses, or typed in?
• Does it keep the evidence an auditor will ask for?
• How does it handle a change of workplace?

Get commuting and business travel right with Capture Expense

Most commuting and business travel questions come down to one test: is the destination a permanent workplace? Home to the office is commuting, a client visit usually isn’t, and the 24-month rule decides when a long assignment tips from one to the other. Hybrid working hasn’t changed any of that, but it has made the evidence harder to keep.

That’s where the risk sits. A mileage figure typed in by the claimant, with the commute worked out from memory, gives an auditor nothing to check. Capture Expense calculates each journey from postcodes, deducts the commute using each claimant’s saved home and office locations, and applies HMRC rates with 10,000-mile banding per person, so the evidence is on the claim from the start.

If you’d like to see how commute deduction works on your own mileage policy, book a demo or take the self-paced product tour.

Frequently asked questions

Q. Can I claim mileage from home to a client site?

A. Usually, yes. A client site is normally a temporary workplace, so the journey is business travel. Your policy may still deduct your usual commute, and HMRC treats the trip as commuting if it’s substantially the same as your normal journey.

Q. Is a workplace temporary if I attend for 18 months?

A. Usually, yes, if you’re there for a task of limited duration and expect it to last under 24 months. The exception is a fixed-term contract: if the job itself lasts 18 months and you’re based there throughout, it’s a permanent workplace under the fixed-term appointment rule (paragraph 3.28).

Q. Does hybrid working make my office a temporary workplace?

A. No. HMRC treats an office you attend regularly as a permanent workplace, even if you choose to work from home on other days.